Authored By: Rob Mohr |
Is the approach of tax season dampening your firm’s holiday cheer? It can be tough to find gratitude in the big case wins and settlements when unwrapping a hefty tax bill, but a new product from Pinnacle Financial Partners, Advocate Capital, and Dominion Assignment Company could be the solution your firm needs.
Advocate Capital, Pinnacle, and Dominion are pleased to offer an exciting, new Legal Fee Lending Solutions for attorneys. Through a collaboration between Pinnacle and Dominion, attorneys can transfer their settlement funds to Dominion, who will manage them with Pinnacle, providing periodic distributions and borrowing opportunities while offering tax strategy and flexibility. This approach to legal fee income creates liquidity through distributions and loans while providing stability through tax planning and automatic loan repayment. Attorneys can use this product to smooth out the tumultuous waves of income and expenses that crash against their firms.
How does it work?
The process is simple. Starting with a settlement agreement allowing for periodic payments, the attorney transfers their settlement funds and assigns them to Dominion, who places them in a trust with Pinnacle. The attorney will then receive periodic distributions from the trust. If desired, the attorney may take out a loan and use the distributions to fulfill the repayment automatically. Concerning taxes, the attorney does not pay taxes on the total amount of the deferred fee but only pays taxes on the income from the trust in the years they receive it. From a planning perspective, an attorney can shift tax liability away from high-income years and spread it and the income over a broader period.
Why should I apply?
Increased tax planning control allows firms to weather their business and economic uncertainties confidently; winning a big case doesn’t come handcuffed to a massive tax bill. With this legal fee lending solution, attorneys can plan better for the future and put their hard-earned trial and settlement winnings to work for their business needs. This model can also extend to clients, allowing minor plaintiffs or those filing for the deceased to place their compensation in trust and delay the tax obligations and fund distribution to a planned and suitable time.
How to get started
If you have any questions or would like to get started with our Legal Fee Lending Solutions program, click here to contact us or call our toll-free number 1.877.894.9724.
LEGAL DISCLAIMER: THE INFORMATION CONTAINED HEREIN AND RELATED MATERIALS WERE CREATED TO PROVIDE AN OVERVIEW OF CERTAIN ASPECTS OF LEGAL FEE LENDING SOLUTIONS. THE INFORMATION PROVIDED HEREIN DOES NOT, AND IS NOT INTENDED TO, CONSTITUTE LEGAL ADVICE; INSTEAD, ALL INFORMATION IS FOR GENERAL INFORMATIONAL PURPOSES ONLY. INFORMATION CONTAINED HEREIN IS SUBJECT TO CHANGE AND MAY NOT CONSTITUTE THE MOST UP-TO-DATE INFORMATION. IT IS RECOMMENDED THAT YOU CONTACT YOUR LEGAL AND TAX ADVISORS TO OBTAIN ADVICE WITH RESPECT TO ANY PARTICULAR LEGAL OR TAX MATTER, AND YOU SHOULD NOT ACT OR REFRAIN FROM ACTING ON THE BASIS OF INFORMATION CONTAINED HEREIN WITHOUT FIRST SEEKING ADVICE FROM YOUR LEGAL AND TAX ADVISORS. ONLY YOUR INDIVIDUAL LEGAL AND TAX ADVISORS CAN PROVIDE ASSURANCES THAT THE INFORMATION CONTAINED HEREIN – AND YOUR INTERPRETATION OF IT – IS APPLICABLE OR APPROPRIATE TO YOUR PARTICULAR SITUATION. ALL LIABILITY WITH RESPECT TO ACTIONS TAKEN OR NOT TAKEN BASED ON THE CONTENTS HEREOF ARE HEREBY EXPRESSLY DISCLAIMED. THE CONTENT HEREIN IS PROVIDED "AS IS;" NO REPRESENTATIONS ARE MADE THAT THE CONTENT IS ERROR-FREE.
